Do you want to start business venture by yourself?
Are you concerned about working on your own?
This post is for you. After reading it, you will know how to be a solopreneur, what exactly it is, what it takes, and how to get started.
You are not alone in dreaming of going solo.
According to Scalable, in 2022 small businesses (SMBs) in the US, amounted to 99% of all companies. And 81% of those are solopreneurs, as defined by SBA. Oberlo entrepreneur stats refer to 528M entrepreneurs in the world. 5.4 million new businesses were started in the US alone in 2021.
Big numbers, huh?
In a world, in which job security no longer exists, many are eager to control their destiny. You share the dream of many talented professionals. To take your career into your own hands, forging your financial independence.
But how to get started? Read on!
Image source: https://pixabay.com/illustrations/entrepreneur-digital-marketing-7140598/
Solopreneur Definition – What is It?
As the name suggests, the term solopreneur refers to an entrepreneurial business that is run by a single person. The succinct definition of “solo entrepreneur” is found in Merriam Webster and in HubSpot. The solopreneur performs all the duties of a business or enterprise, and assumes all the risks. Another typical aspect is a relatively low starting investment. Often the solopreneur starts an initiative parallel to a day job, investing more time than money.
Empowerpioneers.com has a more specific take on solopreneurship. Looking at 40 million American business owners who are fast becoming millionaires (reaching $1M revenues typically after 4 years), solopreneurs do not only run the business alone, but do so with exceptional efficiency. They leverage digital duplication to achieve scalability and super-fast reaction times while still running a “lean and mean” operation. And are active in highly profitable digital micro-niches.
Solopreneur vs. Entrepreneur (vs. Freelancer) – Is There a Difference?
As many entrepreneurial businesses are started by a single person, the difference may not be so obvious. It lies mostly in the business owner’s mindset.
A freelancer has the mindset of a hired hand, whereas solopreneurs and entrepreneurs start an initiative with the goal of creating a company. However, their approaches to business operations differ in 3 points:
One-Stop-Shop vs. Delegation
Solopreneurs like to maintain 100% control. They are involved in everything – a one-stop-shop for decision making. This does not mean they lack efficiency as decisions are made quickly.
Entrepreneurs focus their efforts in the area in which they have the most skill, delegating everything else. They bring added value in leadership and contacts in their industry.
Limited vs. Exponential Growth Capacity
On a first glance it seems solopreneurs have a limited capacity for growth. They are alone and have limited resources and funds. In the digital era, this challenge is resolved with advanced automation tools.
A company has potential for exponential growth as more employees get hired and scalability enlarges revenues.
Personal Branding vs. Corporate Identity
Solopreneurs typically pursue an idea linked to their personality – meaning, they are the business. Their personality – even their person (or body) – is intermingled with the business brand. They intend to stay for a long time. If they leave, the business will either cease to exist or change dramatically.
Entrepreneurs look to an industry they understand well. They drive innovation where they are well known and rely on their expertise and contacts to get the business started. They dream of creating something that is bigger than themselves. If they leave, the company can continue to grow on the same path. Their personal brand may contribute to the corporate identity, but the company does not depend on it.
Why is being a solopreneur so cool?
You get to
- Do what you love
- Be your own boss
- Avoid “9 to 5”
- Earn full value for your work
- Not manage anyone, and no one manages you
29% of SMB owners are motivated by schedule flexibility and mobility, wanting to decide where and when they work. They are also aware that income tends to grow faster than salary increases. In fact, 63% of SMBs were profitable in 2021. According to Oberlo, 67.7% of the world’s millionaires are self-made. Many want to enjoy the perks of owning a business without the responsibilities that come with employees.
How to get it right? Here are 10 steps to get you started.
10 Steps to Success
1. Find Great Ideas
Concentrate on an idea and a field for which you have passion and knowhow. You are the driving force of your fledgling business, and you’ll have to spend enough time on it. So you need to love it!
When creating your product, think about solving your target audience’s problems. A very fast way to grow is finding a low-competition niche, or even creating something totally new, and ruling a blue ocean market (just like Steve Jobs did).
2. Know Your Market Inside Out
Know what customers want, what the competition offers, and where you can be unique. Ask yourself what type of products grab attention or are desired in your target market, and create your offering accordingly, with a unique twist. Think long term and discover future niches for faster growth.
3. Determine Your Solopreneur Business Model & Goals
Understand the business opportunity in full and develop a strategy to make the most of it. Define your pricing (or hourly rate) and go-to-market time frame. Understand your cash flow – you need to know when you start making money and how much. To mitigate risks, you can test your plan on a smaller scale before going all out. Benchmark your performance against your plan and tweak it as needed.
4. Create a Brand your Customers Remember
In today’s digital age, being on social media for business is part of the job. Use your life as an opportunity for marketing. Engage, be genuine and creative. Communicate directly with your fans and turn them into paying customers.
5. Find Good Customers
You are just one person, so you want to invest your efforts and work with the people that are best for you and for your business. Quality over quantity. Evaluate customers according to the following factors:
- They pay well and on time
- You enjoy working with and for them
- It’s simple to work with them, no hassle
- They come back
- You can rely on them
Similar criteria could work for your suppliers too.
6. Master Time Management
Break your goals into achievable bits. It’s easier to go through them in smaller chunks.
Make a to-do list every day, first thing – and then stick to it. Remember your (digital) calendar is your best friend. But switch off your smartphone when working to avoid interruptions.
7. Set a Realistic Budget
Determine all the true costs of running your business, and make sure you can charge prices that make a profit. Do not forget to include personal costs too, as you have no other income. Consider how to optimize your inventory and purchasing procedures to make every cent count. Know tax laws and corporation laws to save where you can: sometimes it’s cost-effective to register a company, even if it has only the one employee (that’s you, Hahn Solo!)
8. Outsource to Get your Operations Rolling
Spend your time only on what you contribute to drive your business. Anything else can be handled by expert subcontractors who do them better. Ensure you understand what your hired helpers do and the impact they have.
9. Expand your Knowledge
You need to stay up-to-date and to nurture your talent. This will help to establish you as an authority in your niche. Collect feedback and learn from customers how to improve your business. As you grow, learn the skills you need to stay on top.
10. Automate to Reduce Errors + Save Time & Money
We are in the era of business digitization, where technology can help you optimize operations, increase efficiency and growth capacity. It does not need to be expensive; sometimes it’s even free. Look for the simple, repetitive tasks and automate them. Use technology to keep track of all business aspects, speed up your reactions, and enhance communication.
Here is a list of ideas to set you on the right track to digitization.
6 Business Activities for Solopreneurs (& Digital Tools that Make Them Easier)
1. Automate Your Marketing
Create-> run-> analyze-> optimize-> and run again. This typical marketing cycle leads to optimization and enhanced performance. Everything can be measured, so make good use the data you collect. Despite the prominence of social media, do not underestimate the power of a distribution list of contacts, to whom you can send good old emails, converting readers to customers.
* Mailmunch, HubSpot and similar: There are various marketing automation and digital campaign management tools that are very easy to use with no coding.
2. Organize Your Information
Collect and keep your business data well ordered. From ideas and sticky notes, to planning and time management.
* Evernote: a tool that enables you to collect and archive notes on the fly: streamline notes on all devices, manage them, share ideas, get alerts and schedules, track passwords etc.
* Asana, or Monday can help you track tasks and supervise your subcontractors’work.
3. Build an Online/ eCommerce Presence (If You Need It)
Create a digital touchpoint for your business, be it on social media or a website. If relevant, build an online shop. Remember you do not own or control social media or selling platforms (such as Amazon or Ebay). Your website however is your own if you register it properly.
* Wix: a free web building tool that has a simple, drag-and-drop user interface (more intuitive than Shopify or WordPress), including an ecommerce module.
4. Save Time with CRM
In a digital world everything is trackable. Analyze your sales cycle and customer habits to increase productivity. You can do that with a CRM – Customer Relationship/Retention Management tool. According to scalable, 31% of SMBs put CRM as top tech priority in 2022.
* SalesForce and HubSpot are leaders in the CRM field. Monday is great for smaller businesses.
5. Count Your Pennies – Accounting
You’ll need a billing system. Sending invoices, preparing tax reports and tracking your spending are all part of owning a business. Keep your books in order to know your cash flow, expenditure and profit inside out. 65% of entrepreneurs blame financial issues for failure.
* Stripe is a great online platform for managing your finances.
6. Network with Others
Social networks such as LinkedIn, Facebook and Twitter (and other local services) will get you all the contacts you need (mentors, peers, suppliers and customers). To use them more efficiently, set up your campaigns with a post scheduler like Hootsuite. Messaging apps such slack as WhatsApp are essential for daily communication and marketing. You can find suppliers and freelancers via platforms such as Upwork, Fiverr, Guru, and PeoplePerHour.
Why do solopreneurs fail?
This post would not be complete without a warning. According to scalable and Screen & Reveal, 66% of entrepreneurs agree that the first year is the toughest (and 20% do not survive it). It’s not only about big success. Every business has its risks. Many fail.
Here are important points to consider as you forge your destiny:
- Start slow, discover if working alone is indeed for you
- Be prepared to invest long hours
- Do not let the nay-sayers pull you down
- Seek and hire help and guidance
- Be ready for inconsistent cash flow
- Keep saving, even when it’s hard to put money aside
Imagine Being Self-Made
Some solopreneurs become entrepreneurs over time. You do not need to decide your path immediately. The most important step in how to be a solopreneur is to get started. Find the courage to follow your dream. The potential to make millions is out there, grab it!